Vernon Litigation Group Representing Investors Sold GWG Bonds
NAPLES, Fla., Aug. 1, 2022 /PRNewswire/ -- Vernon Litigation Group has filed arbitration on behalf of investors sold bankrupt GWG bonds by Emerson Equity.
About 145 independent broker-dealers sold GWG high-yield bonds. Yet, for nearly a decade, GWG Holdings had been funding cash flow by issuing new debt. In January of 2022, the company announced that it had paused L Bond sales as it considered its options. It also stated that it was deferring requests for redemptions. Three months later, GWG filed for Chapter 11 bankruptcy protection. The action triggered concerns about investors recovering their principals.
Brokerage firms should have been proactive in warning potential investors about the risks involved in purchasing GWG bonds, going so far as to stop selling the bonds altogether.
The NASD Notice to Members 04-30 reminds firms of their obligations when selling bonds and bond funds.
A firm's requirements include:
- Knowing the terms, conditions, risks, and rewards of the products they're selling;
- Assessing each customer's needs and ensuring that a particular bond or bond fund is appropriate;
- Disclosing to investors the risks, costs, and rewards of certain bonds or bond funds;
- Providing adequate training and supervising to those who sell bonds or bond funds; and
- Ensuring that the firm's practices comply with NASD and SEC rules.
Firms that failed to adhere to these guidelines when selling GWG bonds caused our clients significant damages. Investors may have been saved from investing in the bankrupt bonds had they received accurate and adequate information upfront.
If you or someone you know was sold GWG bonds, discuss your options for seeking remedy by contacting a member of the Vernon Litigation Group team. Our lawyers are experienced in handling securities arbitration and litigation claims in Southwest Florida and throughout the United States.
Vernon Litigation Group
Chris Vernon | 239-319-4434
SOURCE Vernon Litigation Group
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